If you’re in Cambridge, Vermont and looking for a payday loan, it’s important to know that they are prohibited in the state. But what exactly are payday loans, and why are they banned in Vermont?
What are payday loans?
Payday loans are short-term loans that usually range from $100 to $1,000. Borrowers typically have to repay the loan in full within two weeks, often on their next payday. These loans are often advertised as a quick and easy way to get cash when you’re in a financial bind.
However, payday loans are notorious for their high interest rates and fees. According to the Consumer Financial Protection Bureau (CFPB), the average payday loan borrower pays back $450 in fees for a $350 loan.
Why are payday loans banned in Vermont?
In 2012, Vermont became the first state to prohibit payday loans. The state’s Attorney General at the time, William Sorrell, cited concerns over the high costs and predatory nature of these loans.
According to Sorrell, “Payday loans are financial snake pits that often trap vulnerable Vermonters in a never-ending cycle of debt.”
What are the alternatives to payday loans?
If you need money quickly and don’t have time to wait for a traditional loan, there are still options available to you:
- Ask family or friends for a loan
- Consider a credit card cash advance
- Look into a personal loan from a bank or credit union
- Find out if you’re eligible for government assistance (such as SNAP or LIHEAP)
Interesting Facts and Statistics about Payday Loans in Cambridge, Vermont
- The average APR on a payday loan in the US is 391%
- In 2015, Vermont had the lowest average payday loan interest rate in the country, at 115%
- The CFPB has found that more than 80% of payday loans are rolled over or followed by another loan within 14 days
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